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HOUSE BILL 198
57
TH LEGISLATURE
-
STATE
OF
NEW
MEXICO
-
FIRST SESSION
,
2025
INTRODUCED BY
Derrick J. Lente
AN ACT
RELATING TO TAXATION; INCREASING THE AMOUNT OF INSTALLMENT
AGREEMENTS THAT SHALL BE AVAILABLE FOR PUBLIC INSPECTION;
AMENDING CERTAIN PROVISIONS ON INTEREST ON DEFICIENCIES;
INCREASING THE MINIMUM AMOUNT OF INTEREST THE TAXATION AND
REVENUE DEPARTMENT SHALL PAY FOR OVERPAYMENT OF TAX; INCREASING
CERTAIN PENALTIES FOR FAILURE TO PAY A TAX OR FILE A RETURN,
INTERFERING WITH ADMINISTRATION OF THE TAX ADMINISTRATION ACT,
ASSAULTING TAXATION AND REVENUE DEPARTMENT EMPLOYEES AND
REVEALING TAXPAYER RETURN INFORMATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 7-1-21 NMSA 1978 (being Laws 1965,
Chapter 248, Section 23, as amended) is amended to read:
"7-1-21. INSTALLMENT PAYMENTS OF TAXES--INSTALLMENT
AGREEMENTS.--
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A. Whenever justified by the circumstances, the
secretary or the secretary's delegate may enter into a written
agreement with a taxpayer in which the taxpayer admits
conclusive liability for the entire amount of taxes due and
agrees to make monthly installment payments according to the
terms of the agreement, but not for a period longer than
seventy-two months. No installment agreement shall prevent the
accrual of interest otherwise provided by law.
B. The agreement provided for in this section is to
be known as an "installment agreement". If entered into after
a court acquires jurisdiction over the matter, the agreement
shall be part of a stipulated order or judgment disposing of
the case.
C. At the time of entering into an installment
agreement, the secretary shall require the affected taxpayer or
person to furnish security for payment of the taxes admitted to
be due according to the terms of the agreement, but if the
taxpayer does not provide security, the secretary shall cause a
notice of lien to be filed in accordance with the provisions of
Section 7-1-38 NMSA 1978, and when so filed it shall constitute
a lien upon all the property or rights to property of the
taxpayer in that county in the same manner as in the case of
the lien provided for in Section 7-1-37 NMSA 1978.
D. An installment agreement is conclusive as to
liability for payment of the amount of taxes specified therein
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but does not preclude the assessment of any additional tax.
E. After entering into the agreement, except in
unusual circumstances as require the secretary in the
secretary's discretion to take further action to protect the
interests of the state, no further attempts to enforce payment
of the tax by levy or injunction shall be made; however, if
installment payments are not made on or before the times
specified in the agreement, if any other condition contained in
the agreement is not met or if the taxpayer does not make
payment of all other taxes for which the taxpayer becomes
liable as they are due, the secretary may proceed to enforce
collection of the tax as if the agreement had not been made or
may proceed, as provided in Section 7-1-54 NMSA 1978, against
the security furnished.
F. [Records of] Installment agreements in excess of
[one thousand dollars ($1,000) ] ten thousand dollars ($10,000)
shall be available for inspection by the public. The
department shall [keep the records ] retain installment
agreements for a minimum of three years from the date of the
effective date of the installment agreement."
SECTION 2. Section 7-1-67 NMSA 1978 (being Laws 1965,
Chapter 248, Section 68, as amended) is amended to read:
"7-1-67. INTEREST ON DEFICIENCIES.--
A. [If] In the case of failure due to negligence or
disregard of department rules , a tax imposed is not paid on or
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before the day on which it becomes due, interest shall be paid
to the state on that amount from the first day following the
day on which the tax becomes due, without regard to any
extension of time or installment agreement, until it is paid,
except that:
(1) for income tax imposed on a member of the
armed services of the United States serving in a combat zone
under orders of the president of the United States, interest
shall accrue only for the period beginning the day after any
applicable extended due date if the tax is not paid;
(2) if the amount of interest due at the time
payment is made is less than [one dollar ($1.00) ] ten dollars
($10.00), then no interest shall be due;
(3) if demand is made for payment of a tax,
including accrued interest, and if the tax is paid within ten
days after the date of the demand, no interest on the amount
paid shall be imposed for the period after the date of the
demand;
(4) if a managed audit is completed by the
taxpayer on or before the date required, as provided in the
agreement for the managed audit, and payment of any tax found
to be due is made in full within one hundred eighty days of the
date the secretary has mailed or delivered an assessment for
the tax to the taxpayer, no interest shall be due on the
assessed tax;
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(5) when, as the result of an audit or a
managed audit, an overpayment of a tax is credited against an
underpayment of tax pursuant to Section 7-1-29 NMSA 1978,
interest shall accrue from the date the tax was due until the
tax is deemed paid;
(6) if the department does not issue an
assessment for the tax program and period within the time
provided in Subsection D of Section 7-1-11.2 NMSA 1978,
interest shall be paid from the first day following the day on
which the tax becomes due until the tax is paid, excluding the
period between either:
(a) the one hundred eightieth day after
giving a notice of outstanding records or books of account and
the date of the assessment of the tax; or
(b) the ninetieth day after the
expiration of the additional time requested by the taxpayer to
comply pursuant to Section 7-1-11.2 NMSA 1978, if such request
was granted, and the date of the assessment of the tax; and
(7) if the taxpayer was not provided with
proper notices as required in Section 7-1-11.2 NMSA 1978,
interest shall be paid from the first day following the day on
which the tax becomes due until the tax is paid, excluding the
period between one hundred eighty days prior to the date of
assessment and the date of assessment.
B. No interest shall be assessed against a taxpayer
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if the failure to pay an amount of tax when due results from a
mistake of law made in good faith and on reasonable grounds.
[B.] C. Interest due to the state under Subsection
A or [D] E of this section shall be at the underpayment rate
established for individuals pursuant to Section 6621 of the
Internal Revenue Code computed on a daily basis; provided that
if a different rate is specified by a compact or other
interstate agreement to which New Mexico is a party, that rate
shall be applied to amounts due under the compact or other
agreement.
[C.] D. Nothing in this section shall be construed
to impose interest on interest or interest on the amount of any
penalty.
[D.] E. If any tax required to be paid in
accordance with Section 7-1-13.1 NMSA 1978 is not paid in the
manner required by that section, interest shall be paid to the
state on the amount required to be paid in accordance with
Section 7-1-13.1 NMSA 1978. If interest is due under this
subsection and is also due under Subsection A of this section,
interest shall be due and collected only pursuant to Subsection
A of this section."
SECTION 3. Section 7-1-68 NMSA 1978 (being Laws 1965,
Chapter 248, Section 69, as amended) is amended to read:
"7-1-68. INTEREST ON OVERPAYMENTS.--
A. As provided in this section, interest shall be
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allowed and paid on the amount of tax overpaid by a person that
is subsequently refunded or credited to that person.
B. Interest on overpayments of tax shall accrue and
be paid at the underpayment rate established pursuant to
Section 6621 of the Internal Revenue Code, computed on a daily
basis; provided that if a different rate is specified by a
compact or other interstate agreement to which New Mexico is a
party, that rate shall apply to amounts due under the compact
or other agreement.
C. Unless otherwise provided by this section,
interest on an overpayment not arising from an assessment by
the department shall be paid from the date of the claim for
refund until a date preceding by not more than thirty days the
date of the credit or refund to any person; and interest on an
overpayment arising from an assessment by the department shall
be paid from the date of overpayment until a date preceding by
not more than thirty days the date of the credit or refund to
any person.
D. No interest shall be allowed or paid with
respect to an amount credited or refunded if:
(1) the amount of interest due is less than
[one dollar ($1.00)] ten dollars ($10.00) ;
(2) the credit or refund is made within:
(a) fifty-five days of the date of the
complete claim for refund of income tax, pursuant to either the
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Income Tax Act or the Corporate Income and Franchise Tax Act
for the tax year immediately preceding the tax year in which
the claim is made;
(b) sixty days of the date of the
complete claim for refund of any tax not provided for in this
paragraph;
(c) seventy-five days of the date of the
complete claim for refund of gasoline tax to users of gasoline
off the highways;
(d) one hundred twenty days of the date
of the complete claim for refund of tax imposed pursuant to the
Resources Excise Tax Act, the Severance Tax Act, the Oil and
Gas Severance Tax Act, the Oil and Gas Conservation Tax Act,
the Oil and Gas Emergency School Tax Act, the Oil and Gas Ad
Valorem Production Tax Act, the Natural Gas Processors Tax Act
or the Oil and Gas Production Equipment Ad Valorem Tax Act; or
(e) one hundred twenty days of the date
of the complete claim for refund of income tax, pursuant to the
Income Tax Act or the Corporate Income and Franchise Tax Act,
for any tax year more than one year prior to the year in which
the claim is made;
(3) Sections 6611(f) and 6611(g) of the
Internal Revenue Code, as those sections may be amended or
renumbered, prohibit payment of interest for federal income tax
purposes;
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(4) the credit results from overpayments found
in an audit of multiple reporting periods and applied to
underpayments found in that audit or refunded as a net
overpayment to the taxpayer pursuant to Section 7-1-29 NMSA
1978;
(5) the department applies the credit or
refund to an intercept program, to the taxpayer's estimated
payment prior to the due date for the estimated payment or to
offset prior liabilities of the taxpayer pursuant to Subsection
E of Section 7-1-29 NMSA 1978;
(6) the credit or refund results from
overpayments the department finds pursuant to Subsection F of
Section 7-1-29 NMSA 1978 that exceed the refund claimed by the
taxpayer on the return; or
(7) the refund results from a tax credit
pursuant to the Investment Credit Act, Laboratory Partnership
with Small Business Tax Credit Act, Technology Jobs and
Research and Development Tax Credit Act, Film Production Tax
Credit Act, Affordable Housing Tax Credit Act or a rural job
tax credit or high-wage jobs tax credit.
E. Nothing in this section shall be construed to
require the payment of interest upon interest."
SECTION 4. Section 7-1-69 NMSA 1978 (being Laws 1965,
Chapter 248, Section 70, as amended) is amended to read:
"7-1-69. CIVIL PENALTY FOR FAILURE TO PAY TAX OR FILE A
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RETURN.--
A. Except as provided in Subsection C of this
section, in the case of failure due to negligence or disregard
of department rules and regulations, but without intent to
evade or defeat a tax, to pay when due the amount of tax
required to be paid, to pay in accordance with the provisions
of Section 7-1-13.1 NMSA 1978 when required to do so or to file
by the date required a return regardless of whether a tax is
due, there shall be added to the amount assessed a penalty in
an amount equal to the greater of:
(1) two percent per month or any fraction of a
month from the date the tax was due multiplied by the amount of
tax due but not paid, not to exceed twenty percent of the tax
due but not paid;
(2) two percent per month or any fraction of a
month from the date the return was required to be filed
multiplied by the tax liability established in the late return,
not to exceed twenty percent of the tax liability established
in the late return; or
(3) a minimum of [five dollars ($5.00) ]
fifteen dollars ($15.00) , but the [five-dollar ($5.00) ] minimum
penalty shall not apply to taxes levied under the Income Tax
Act, Corporate Income and Franchise Tax Act or taxes
administered by the department pursuant to Subsection B of
Section 7-1-2 NMSA 1978.
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B. No penalty shall be assessed against a taxpayer
if the failure to pay an amount of tax when due results from a
mistake of law made in good faith and on reasonable grounds.
C. If a different penalty is specified in a compact
or other interstate agreement to which New Mexico is a party,
the penalty provided in the compact or other interstate
agreement shall be applied to amounts due under the compact or
other interstate agreement at the rate and in the manner
prescribed by the compact or other interstate agreement.
D. In the case of failure, with willful intent to
evade or defeat a tax, to pay when due the amount of tax
required to be paid, there shall be added to the amount fifty
percent of the tax or a minimum of [twenty-five dollars
($25.00), whichever is greater ] seventy-five dollars ($75.00)
as penalty.
E. If demand is made for payment of a tax,
including penalty imposed pursuant to this section, and if the
tax is paid within ten days after the date of such demand, no
penalty shall be imposed for the period after the date of the
demand with respect to the amount paid.
F. If a taxpayer makes electronic payment of a tax
but the payment does not include all of the information
required by the department pursuant to the provisions of
Section 7-1-13.1 NMSA 1978 and if the department does not
receive the required information within five business days from
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the later of the date a request by the department for that
information is received by the taxpayer or the due date, the
taxpayer shall be subject to a penalty of two percent per month
or any fraction of a month from the fifth day following the
date the request is received. If a penalty is imposed under
Subsection A of this section with respect to the same
transaction for the same period, no penalty shall be imposed
under this subsection.
G. No penalty shall be imposed on:
(1) tax due in excess of tax paid in
accordance with an approved estimated basis pursuant to Section
7-1-10 NMSA 1978;
(2) tax due as the result of a managed audit;
or
(3) tax that is deemed paid by crediting
overpayments found in an audit or managed audit of multiple
periods pursuant to Section 7-1-29 NMSA 1978."
SECTION 5. Section 7-1-71.3 NMSA 1978 (being Laws 2005,
Chapter 108, Section 4) is amended to read:
"7-1-71.3. WILLFUL FAILURE TO COLLECT AND PAY OVER
TAXES.--
A. A person who is required to collect, account for
and pay over a tax imposed by the state and who willfully, with
the intent to defraud, fails to collect or truthfully account
for and pay over the tax due to the state is guilty of a
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felony, and upon conviction thereof, shall be fined not more
than [five thousand dollars ($5,000) ] ten thousand dollars
($10,000) or imprisoned for a period of not less than six
months and not more than three years, or both, together with
the costs of prosecution.
B. As used in this section:
(1) "tax" does not include civil penalties or
interest; and
(2) "willfully" means intentionally,
deliberately or purposely, but not necessarily maliciously."
SECTION 6. Section 7-1-71.4 NMSA 1978 (being Laws 2007,
Chapter 127, Section 2) is amended to read:
"7-1-71.4. TAX RETURN PREPARER--ELECTRONIC FILING
REQUIREMENT--PENALTY.--
A. [In taxable years beginning on or after January
1, 2008] A tax return preparer who prepares over twenty-five
personal income tax returns for a taxable year shall ensure
that each return is submitted to the department by a
department-approved electronic media, unless a person for whom
the preparer files a return requests, in a form prescribed by
the department, that the return be filed by other means in
accordance with department rule.
B. A tax return preparer shall pay to the
department a penalty not to exceed [five dollars ($5.00) ] ten
dollars ($10.00) for each tax return filed in violation of this
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section."
SECTION 7. Section 7-1-72 NMSA 1978 (being Laws 1965,
Chapter 248, Section 73) is amended to read:
"7-1-72. ATTEMPTS TO EVADE OR DEFEAT TAX.--Any person who
willfully attempts to evade or defeat any tax or the payment
thereof is, in addition to other penalties provided by law,
guilty of a felony and, upon conviction thereof, shall be fined
not less than [one thousand dollars ($1,000) ] ten thousand
dollars ($10,000) nor more than [ten thousand dollars
($10,000)] fifty thousand dollars ($50,000) , or imprisoned not
less than one year nor more than five years, or both such fine
and imprisonment, together with the costs of prosecution."
SECTION 8. Section 7-1-73 NMSA 1978 (being Laws 1965,
Chapter 248, Section 74, as amended) is amended to read:
"7-1-73. TAX FRAUD.--
A. A person is guilty of tax fraud if the person:
(1) willfully makes and subscribes any return,
statement or other document that contains or is verified by a
written declaration that it is true and correct as to every
material matter and that the person does not believe it to be
true and correct as to every material matter;
(2) willfully assists in, willfully procures,
willfully advises or willfully provides counsel regarding the
preparation or presentation of a return, affidavit, claim or
other document pursuant to or in connection with any matter
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arising under the Tax Administration Act or a tax administered
by the department, knowing that it is fraudulent or knowing
that it is false as to a material matter, whether or not that
fraud or falsity is with knowledge or consent of:
(a) the taxpayer or other person liable
for taxes owed on the return; or
(b) a person who signs a document
stating that the return, affidavit, claim or other document is
true, correct and complete to the best of that person's
knowledge;
(3) files any return electronically, knowing
the information in the return is not true and correct as to
every material matter;
(4) with intent to evade or defeat the payment
or collection of any tax, or, knowing that the probable
consequences of the person's act will be to evade or defeat the
payment or collection of any tax, removes, conceals or releases
any property on which levy is authorized or that is liable for
payment of tax under the provisions of Section 7-1-61 NMSA
1978, or aids in accomplishing or causes the accomplishment of
any of the foregoing;
(5) with intent to evade or defeat the payment
or collection of any tax, or, knowing that the probable
consequences of the person's act will be to evade or defeat the
payment or collection of any tax, purchases, installs or uses
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any sales suppression software; or
(6) with the intent to evade or defeat the
payment or collection of any tax, or, knowing that the probable
consequences of the person's act will be to evade or defeat the
payment or collection of any tax, sells, licenses, purchases,
installs, transfers, sells as a service, manufactures, develops
or possesses any sales suppression software with the purpose to
defeat or evade the payment or collection of any tax.
B. Whoever commits tax fraud when the amount of the
tax owed is [two hundred fifty dollars ($250) ] five hundred
dollars ($500) or less is guilty of a petty misdemeanor and
shall be sentenced pursuant to the provisions of Section
31-19-1 NMSA 1978.
C. Whoever commits tax fraud when the amount of the
tax owed is over [two hundred fifty dollars ($250) ] five
hundred dollars ($500) but not more than [five hundred dollars
($500)] one thousand dollars ($1,000) is guilty of a
misdemeanor and shall be sentenced pursuant to the provisions
of Section 31-19-1 NMSA 1978.
D. Whoever commits tax fraud when the amount of the
tax owed is over [five hundred dollars ($500) ] one thousand
dollars ($1,000) but not more than [two thousand five hundred
dollars ($2,500)] five thousand dollars ($5,000) is guilty of a
fourth degree felony and shall be sentenced pursuant to the
provisions of Section 31-18-15 NMSA 1978.
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E. Whoever commits tax fraud when the amount of the
tax owed is over [two thousand five hundred dollars ($2,500) ]
five thousand dollars ($5,000) but not more than [twenty
thousand dollars ($20,000) ] fifty thousand dollars ($50,000) is
guilty of a third degree felony and shall be sentenced pursuant
to the provisions of Section 31-18-15 NMSA 1978.
F. Whoever commits tax fraud when the amount of the
tax owed is over [twenty thousand dollars ($20,000) ] fifty
thousand dollars ($50,000) is guilty of a second degree felony
and shall be sentenced pursuant to the provisions of Section
31-18-15 NMSA 1978.
G. In addition to the fines imposed pursuant to
this section, a person who commits tax fraud shall pay the
costs of the prosecution of the person's case.
H. As used in this section:
(1) "sales suppression software" means hidden
or concealed computer software, also known as phantomware, for
a point-of-sale system that can create a second set of records
or eliminate or manipulate transaction records that may or may
not be preserved in digital formats in order to misrepresent
the existence or the true record of a transaction in the point-
of-sale system. "Sales suppression software" includes an
electronic device that carries or contains sales suppression
software;
(2) "tax" does not include civil penalties or
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interest; and
(3) "willfully" means intentionally,
deliberately or purposely, but not necessarily maliciously."
SECTION 9. Section 7-1-74 NMSA 1978 (being Laws 1965,
Chapter 248, Section 75) is amended to read:
"7-1-74. INTERFERENCE OR ATTEMPTS CORRUPTLY, FORCIBLY OR
BY THREAT TO INTERFERE WITH ADMINISTRATION OF REVENUE LAWS.--
Whoever forcibly, or by bribe, threat or other corrupt practice
obstructs or impedes or attempts to obstruct or impede the due
administration of the provisions of the Tax Administration Act
shall, upon conviction thereof, be fined not less than [two
hundred fifty dollars ($250) ] one thousand dollars ($1,000) nor
more than [ten thousand dollars ($10,000) ] twenty-five thousand
dollars ($25,000) or imprisoned for not less than three months
nor more than one year, or both, together with costs of
prosecution."
SECTION 10. Section 7-1-75 NMSA 1978 (being Laws 1971,
Chapter 276, Section 12, as amended) is amended to read:
"7-1-75. ASSAULT AND BATTERY OF A DEPARTMENT EMPLOYEE.--
Whoever assaults and batters or attempts to assault and batter
an employee of the department acting within the scope of [his ]
the employee's employment shall, upon conviction thereof, be
fined not less than [one hundred dollars ($100) ] one thousand
dollars ($1,000) nor more than [five hundred dollars ($500) ]
five thousand dollars ($5,000) or be imprisoned for not less
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than three days nor more than six months, or both, together
with costs of prosecution. Jurisdiction over actions brought
under this section is hereby granted to magistrate courts."
SECTION 11. Section 7-1-76 NMSA 1978 (being Laws 1965,
Chapter 248, Section 76, as amended) is amended to read:
"7-1-76. REVEALING INFORMATION CONCERNING TAXPAYERS.--A
person who reveals to another person any return or return
information that is prohibited from being revealed pursuant to
Section 7-1-8 NMSA 1978 or who uses a return or return
information for any purpose that is not authorized by Sections
7-1-8 through 7-1-8.11 NMSA 1978 is guilty of a [misdemeanor ]
fourth degree felony and shall, upon conviction thereof, be
fined not more than [one thousand dollars ($1,000) ] five
thousand dollars ($5,000) or imprisoned up to one year, or
both, together with costs of prosecution, and shall not be
employed by the state for a period of five years after the date
of the conviction."
SECTION 12. EFFECTIVE DATE.--
A. The effective date of the provisions of Section
1 of this act is July 1, 2025.
B. The effective date of the provisions of Sections
2 through 11 of this act is January 1, 2026.
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